Core Viewpoints - The National Development and Reform Commission announced that in July, the third batch of funds for the consumption upgrade program will be released, indicating a continued focus on "people's livelihood" over infrastructure, which may support stock market resilience [1][2][3] - The banking sector has reached a historical high, with the current dividend yield spread over the 10-year government bond yield at approximately 2.36%, which is at the 16% low percentile level since 2008, suggesting that the historical context may indicate a lower actual percentile [1][3] - Despite the low yield spread, it does not imply a significant adjustment for bank stocks, as the scarcity of assets in a low-interest-rate environment has reduced the risk premium for high-dividend sectors, indicating potential opportunities in the banking industry, albeit with lowered expectations [1][3] Banking Sector Analysis - The banking index rose by 1.06%, continuing to set historical highs, with the median dividend yield of the constituent stocks of the China Securities Banking Index dropping to 4.00% [3] - The low interest rate environment has altered the risk premium dynamics, suggesting that the banking sector may still present opportunities despite the current low yield levels [3] Hong Kong Market Insights - The Hong Kong stock market experienced a larger decline than the A-share market, primarily due to the Hong Kong dollar reaching the weak side of the convertibility guarantee, leading to tightened liquidity [4] - Despite the tightening liquidity, there is still a continuous inflow of southbound funds, which may support the performance of the Hong Kong stock market [4]

Core Viewpoint - The domestic monetary easing environment is expected to continue, with the possibility of further deepening low interest rates, leading to a decline in the holding experience of broad fixed-income products [1][2][3] - Residents may gradually move out of their comfort zone of long-term fixed-income assets and shift their focus towards the stock market, considering net worth products that include equity assets, in line with their risk tolerance [1][3] Market Overview - The A-share market experienced a decline, with the Shanghai Composite Index falling by 0.79%, the Shenzhen Component down by 1.21%, and the ChiNext Index decreasing by 1.36%, with a total market turnover of 12,808 billion [5] - The Hong Kong market also saw declines, with the Hang Seng Index down by 1.99% and the Hang Seng Tech Index down by 2.42% [5] Investment Strategy - In the current market context, it is suggested to consider flexible high-low cuts while being cautious about chasing high-valued and crowded assets, and to shift towards sectors that are temporarily lagging but have policy support and good long-term development potential, such as technology [1][3] - Investment products such as the Silverhua Shanghai Stock Exchange Science and Technology Innovation Board Artificial Intelligence ETF and actively managed funds are recommended for investors looking to enter the AI sector [4] Regulatory Environment - The Financial Regulatory Bureau has issued guidelines to life insurance companies regarding the regulation of dividend levels, prohibiting arbitrary increases in dividend levels that deviate from actual asset-liability and investment income situations [3] Global Economic Context - The Federal Reserve has maintained the federal funds rate in the range of 4.25% to 4.50%, with expectations of a potential 50 basis point cut by the end of 2025 [5] - Japan's exports fell by 1.7% year-on-year in May, raising concerns about a technical recession amid the impact of tariffs [9]